Look Out for that Loophole

In the past several months, the initiative to stop corporate and union payroll deductions for political purposes has taken a drubbing up and down California. Appearing as Proposition 32 on the ballot for the November 6 election, the initiative would also prevent corporations and unions from making direct political contributions. And it would stop donations by contractors to those in government who award the contracts.

Despite Prop 32’s surface appeal, editorialists and newswriters have painted it as deceptive and a fraud. The critics’ complaint is that the proposition exempts some common types of business organizations. An example is limited liability companies, which would not be covered. Hefty corporate political action committees, the so-called super PACs, would remain free to receive anonymous donations. Thus, while going strong against unions, the proposition has negligible effects on corporate political action.

Jennifer Badgley

Proposition 32 was written by the Lincoln Club of Orange County. But as criticism has grown louder, conservative support has been largely silent. So it was no surprise that T.J. Zane, president and chief executive of the Lincoln Club of San Diego County, did not respond when I sent him two requests to interview an advocate of the initiative. I was hoping one of the club’s members would explain how Proposition 32 is likely to benefit California citizens. After all, on July 17, SignOnSanDiego wrote that Zane claimed the proposition was “the most important measure on the ballot” and that “the club has been at the forefront of campaign finance reform.”

Micah Mitrosky

It didn’t take long, however, for Lorena Gonzalez, secretary-treasurer of the San Diego and Imperial Counties Labor Council, to oblige a similar request. By phone, she tells me that “though the initiative is couched as campaign finance reform, the people behind it — corporate CEOs, billionaires, insurance companies, bankers, Wall Street — they’re the same people who are exempted from it. They don’t want to allow any other voices.”

T.J. Zane

The effort goes well beyond California. In mid-September, the Iowa-based American Future Fund dumped over $4 million into the campaign to pass Prop 32. The fund is associated with the Koch brothers, the big-oil billionaires who were behind the anti-union drive in Wisconsin last year.

In 1998 and again in 2005, similar, though unsuccessful, propositions were written to stop politically motivated payroll deductions by unions. This year, corporations have been added. Eight times in the text of Proposition 32, business or corporations are linked with unions as the special interests that must be reined in. But “businesses outspend organized labor at a margin of 15 to 1,” says Gonzalez. “At least we have that 1. At least we still have a voice.”

Gonzalez’s 15-to-1 claim can be no more than an estimate, as there are no reliable figures on how much money businesses contribute to political causes. On July 10, however, the Wall Street Journal gave a few figures for how much money labor unions spend on politics and lobbying across the country, arguing that it’s “about four times as much…as generally thought.”

Among unions across the country, “the top political spender” in 2009 and 2010, according to the Journal, was the Service Employees International Union, which “reported spending $150 million on politics and lobbying..., up from $62 million in 2005 and 2006.” Business spending is harder to track because the spending that “does have to be disclosed can’t be found in a single database or two, as is the case with unions,” who face more legal requirements to report.

But the key issue in Prop 32 is not the amount of money spent but how it is collected. “Corporate employers and unions,” reads the proposition, “often pressure, sometimes subtly and sometimes overtly, workers to give up a portion of their paycheck to support the political objectives of the corporation or union.” This is done “without any regard for the political views of the employees who provide the money.” So the initiative wants to prevent this “inherently coercive means of payroll deduction” and “make all employee political contributions by any other means strictly voluntary.”

Labor unions are the target here, although, on September 25, the Reader’s “News Ticker” gave the unusual example of Qualcomm, Inc., deducting employee contributions. If Prop 32 passes, these deductions will also face elimination.

As for the payroll deductions used by unions, the labor council’s Gonzalez is adamant that the process is fair, allowing employees to opt out if they disagree with how their money is being spent. “If you have a ‘union shop,’ meaning that the union represents everybody in the entire shop [even if they’re opposed to unions], every individual gets the option to opt out.” Once a year, employees are told of their rights. For negotiations that the union conducts on wages, benefits, and conditions of employment, “employees do pay representational dues. But there is no ability in the United States to force somebody to be a union member.”

For more specifics, I call Jennifer Badgley, political director at the International Brotherhood of Electrical Workers Local 569 in San Diego. Despite claims that dissenting workers in some unions receive hostile treatment, Badgley tells me that the Brotherhood workers suffer no repercussions, other than loss of membership, for exercising their “Beck rights,” established by the U.S. Supreme Court in 1988. These include the right to take a refund of any portion of their union dues that are used for political purposes a worker does not agree with. As for the union’s political action, “Our political process is democratic,” says Badgley. “Members form a legislative committee, and they submit decisions to the full membership for a vote.”

In a surprise to some, the electrical workers’ union employs an “environmental organizer.” Micah Mitrosky formerly worked for the Sierra Club. In many places, the building trades, in their support of big construction projects that provide more jobs, find themselves at odds with the environmental community. But “a couple of years ago,” Lorena Gonzalez tells me, “the labor council passed a resolution that opposes the gutting of environmental measures, such as the Clean Water Act, the California Environmental Quality Act, and the Coastal Commission.” She wonders what organizations, besides unions, are left to push the combined agenda of the progressive movement. ■